Reserve Funds Should Cover Needed Roof
QUESTION: There are 47 homes in our planned development. Forty have tile roofs and seven have shake roofs. Our homes are 20 years old, and the shake roofs will soon need replacing. The county building code now requires that shake roofs be replaced with other types of approved roof materials when they need replacement.
For three years the board of directors has been trying to find a way to avoid financial responsibility for the replacement of the shake roofs. The current board members all own homes that have tile roofs. Now they are diligently studying the differences in roof installation. They have stated that if a different underlayment is required or if hot mopping is required, the association will not be responsible.
Is there a fair way to settle the controversy and determine the responsibility for the roof replacement for the seven homes with the shake roofs?
ANSWER: There are legal issues relating to your problem that can be resolved quickly by an attorney who is well-versed in community association law. The board of directors should ensure that the association is operating in compliance with its governing documents, the state law and local building code requirements. The board does not have the authority to arbitrarily decide what the association will do for one owner and will not do for another.
The association’s maintenance and repair responsibilities are spelled out in the association’s declaration of covenants, conditions and restrictions. If the roofs are the association’s responsibility, then the association’s reserve study should include the roof replacement on the schedule of repair and replacement. The estimated cost of the roof replacement should be calculated and added to your association’s reserve budget. If adequate reserve funds have not been set aside, then a special assessment will have to be levied against each owner when replacement is needed.
If the association is responsible for the roofs, then each owner must share in the cost of the roof replacement, not just the individual owners whose roofs are being replaced. The board of directors needs to understand that the owners have a duty to protect everyone’s investment.
The uncertainty and controversy surrounding the roof responsibility leads me to assume that your association’s reserve study, required by the California Civil Code, is inadequate or nonexistent. A reserve study provides comprehensive information that the board can use as a resource when making long-range financial decisions and adopting annual operating and reserve budgets that are adequate for the protection of all of the owners.
Your board of directors should seek the advice of an attorney and a reserve study company so that the owners can prepare for the future financial needs of the association.
Bylaws May Require Annual Election
Q: I purchased and moved into my condominium unit a year and a half ago. There is very little communication from the board of directors to the rest of the owners. They have not scheduled any meetings or elections since I moved into the complex. How often should board elections take place?
A: Your association’s bylaws will probably state that elections are supposed to be held annually. If this is not occurring, ask your board when the next election is going to be scheduled. The board is obligated to conduct annual meetings according to the legal documents of the association.
Allow Adequate Time When Mailing Payment
Q: The owners in my homeowner association are required to send their monthly assessment payments to a post office box. Can the owner rely on the postmark date to show that the payment was sent on time?
A: Postmark dates are not always readable, and the postmark date sometimes has no reasonable correlation with the date that a piece of mail is actually delivered.
Your monthly assessment payment is due on the first of the month and is delinquent if payment has not been received 15 days after that. Unless your association’s legal documents state otherwise, a late charge of $10 or 10%, whichever is greater, may be added to a delinquent owner’s account on the 16th day of the month.
It is your responsibility to mail the payment with ample time for the delivery to be received within the 15-day grace period. Don’t expect your association’s treasurer or its manager to look at postmarks and save envelopes so that you can avoid paying a late charge.
Disclosure of your association’s delinquency procedures, including lien rights and other legal remedies, must be sent to each owner annually within the 60-day period preceding the beginning of each fiscal year. Ask for clarification if the association’s procedures are not spelled out completely in the disclosure statement.
Homeowner’s Group Needs to Get Organized
Q: I live in an 18-unit homeowner association. Our units are attached townhomes. The association is responsible for insuring the structure. We recently discovered that the association’s insurance policy had lapsed because of non-payment of the premium. We called the insurance agent and were successful in getting the insurance policy reinstated.
We have never held an election, so there is no board of directors. The person who had been paying the bills and taking care of the maintenance recently gave all of the association’s accounting records to his neighbor and moved away.
We know that we have to get ourselves organized. What is the first step?
A: First, read your association’s legal documents so that you will understand the procedures for electing a board of directors. Membership voting, board elections and meeting requirements can be found in the bylaws.
Next, consult an attorney to assist you, if you need legal advice on organizing the election. After a board of directors is in place, the board members will have the authority and the responsibility to set up procedures for collecting assessments, paying bills, contracting for services and handling all of the other business affairs of the association.
There are probably other skeletons in the closet. For example, you may find that tax returns haven’t been filed, and other laws may have been ignored. There may be delinquent owners that have not been pursued. If you need management advice, ask your attorney for referrals to property management companies or consultants who specialize in community association management.
Hickenbottom is a past president of the Greater Los Angeles chapter of the Community Associations Institute, a national nonprofit research and educational organization. She welcomes readers’ questions but cannot answer them individually. Readers with questions or comments can write to her in care of “Condo Q&A;,” Box 5068, Thousand Oaks, CA 91360.
